Commissioner of Internal Revenue v. Tayengco

FOURTH DIVISION [CA-G.R. SP No. 45726. September 30, 1998.] COMMISSIONER OF INTERNAL REVENUE and COMMISSIONER OF CUSTOMS , petitioner , vs . THOMAS TAYENGCO and ERLINDA TAYENGCO , respondents . D E C I S I O N BARRIOS , J p : The Court of Tax Appeals in the concluding and decretal portion of its Decision promulgated on October 2, 1997, pronounced that: In conclusion , We find petitioner ' s vehicle to be a truck and not an automobile , hence not subject to the ad valorem tax as provided under Section 149 of the Tax Code . WHEREFORE , in view of the foregoing , the instant Petition for Review is hereby GRANTED . Respondent Commissioner of Customs is ordered to REFUND the amount of P405 , 619 . 47 in the name of the petitioners . No costs . (p. 48, rollo) Petitioners assail this and raise for its reversal and setting aside the grounds that: The Court of Tax Appeals erred in classifying the single cab 1989 model Chevy Blazer as a truck not subject to ad valorem tax with its (I) strained application of Section 3(b) 2nd paragraph of Article II of Republic Act No. 4136 otherwise known as the Land Transportation and Traffic Code, and (II) by considering the used car guide of the National Automobile Dealers Association which is a U.S. publication. (Petition For Review, pp. 29-30, rollo) The case teeters on the question of: is it an automobile or is it a truck? If an automobile then the petitioners, for the government, will keep the P405,619.47 ad valorem tax under Section 149 of the National Internal Revenue Code paid by the respondents under protest. But if a truck, then the petitioners must cough up and return that sum to the respondents. Also raised as an issue is the timeliness of the filing of this petition for review. The antecedent facts are not disputed. The respondents are spouses, and as balikbayans from the USA brought home in November 23, 1993 a 1989 Chevy Blazer with a 5,700 cc engine displacement. This was a no dollar importation declared under Customs Informal Entry No. 86516-93. On December 17, 1993 a joint inspection of the vehicle was conducted by the Bureau of Internal Revenue, Bureau of Customs, Bureau of Import Services of the Department of Trade and Industry, and the Land Transportation Office. Tipped that the finding was that it is an automobile and they were to be slapped with an ad valorem tax, the respondents wrote the BIR for a legal opinion while advancing proofs and arguments that it was a truck. Fearful that their motor vehicle would suffer the fate of many others while awaiting resolution, the respondents on February 15, 1994 paid under protest the customs duties, VAT, and excise taxes imposed on it in the aggregate sum of P539,427.00 (Exhs. A & B). But consistent with their stand that it was illegally imposed, on February 22, 1994 the respondents wrote the BIR (Exh. L) for a refund of the ad valorem tax collected in the sum of P371,818.00. The BIR referred it to the BoC but which in turn believed that its determination is subordinated to that by the BIR. The matter was not acted upon and with the two (2) year prescriptive period under Section 230 of the NIRC nearing expiry, the respondents filed this appealed case with the CTA on August 18, 1995, and which the petitioners were represented by the Office of the Solicitor General. Copy of the appealed Decision was received by the SolGen on October 9, 1997, and on October 24, 1997 or the fifteenth day the petitioners filed a Motion For Reconsideration. This was denied in a Resolution copy of which was received by the SolGen on December 11, 1997. The petitioners then filed before this Court what appears as their second motion for extension of time to file a petition for review on December 23, 1997, and filed their petition on January 9, 1998. On the very day that the petitioners filed with the CTA the Motion For Reconsideration they also filed with this Court a motion for extension of time for the filing of a petition for review. The extension We conditionally granted was not availed of when one set of their counsels noted that other counsels have filed a motion that kept the case active with the CTA. In effect the petitioners, whose counsels could not seem to get their act together, filed before Us a premature motion for extension. Treating the issue of timeliness of the petition, as above chronicled the petitioners filed their motion for reconsideration on the fifteenth and last day after their receipt of copy of the Decision. When they received its denial on December 11, 1997, they had on top of it another fifteen (15) days or until December 26, 1997 within which to file their petition for review for " The appeals shall be taken within fifteen (15) days from notice . . . of the denial of petitioner ' s motion for new trial or reconsideration . . ." (Rule 43, Sec. 4, 1997 Rules of Court) This is a change from the previous rule that gave an appellant only the remaining time of the original period, and thus their motion for extension filed on December 23, 1997 and their petition for review filed within the extension allowed, were seasonably made. Saved from that technicality, yet the petition must fail on the merits. As said the petitioners did not dispute the facts beyond the bland stand of their having lack or insufficient knowledge of the truth of the averments in the complaint and the resort to presumptions of legality and regularity. They assert that E.O. 90 000-00 377-93 dated September 20, 1993 provides that: . . . thus , the same vehicle would be subject to ad valorem tax at the compromise rate indicated under said Finance Department Order IF THE YEAR MODEL IS FROM 1988 to 1992 and the engine displacement is between 2 , 000 cc to 4 , 500 cc . (Memorandum, p. 91, record) and as the subject vehicle is vintage 1989, it is therefore within the coverage because to be exempt from ad valorem tax " there must be compliance both with respect to year model of the vehicle as well as engine displacement ." (Memorandum p. 92 record) Wrong. On the contrary, if a motor vehicle is not of a make within the years specified or if its engine displacement is outside the specified range, then is not subject to ad valorem tax. Both requisites must concur. Stated otherwise, the tax is imposable only to a motor vehicle of the year model 1988 to 1992 and having an engine displacement between 2,000 cc to 4,500 cc. The petitioners' subject Chevy Blazer, with an admitted displacement of 5,700 cc is perforce outside the coverage. Such exemption from ad valorem tax were inconsistently accorded by the BIR to coetaneous importations of like vehicles brought in under similar circumstances by Zaldy Zshornack and Fermin Arboleda who were issued respectively an Authority To Release Imported Goods (Annex G, p. 17 & Annex H, p. 18, record) without being subjected to such tax. The petitioners insist on an astigmatic interpretation that a motor vehicle is a truck if it is intended and is capable of hauling nothing less than humongous loads, defining it by way of example that: "a truck is limited to any of the following heavy vehicles: a sand and gravel truck or dumptruck, a cargo truck for transport of freight and merchandise (e.g. logs, beer and other bottled beverages, container van trucks, tankers carrying gas and petroleum products, etc. (which are six, ten, fourteen or eighteen wheeler trucks). Petition, pp. 33-34, rollo. and decries the CTA's acceptance of the used car guide of the National Automobile Dealers Association of the United States (Exh. H) classifying a Chevy Blazer as a truck. Undeniably the USA is a leading manufacturer and until lately was our main source of motor vehicles. It then cannot be said gratuitously, as the petitioners did, that the classification of trucks in the USA just cannot hold true in the Philippine milieu. The CTA in the assailed Decision found and concluded that: As viewed by us, the vehicle is a two-door singled cab type and can only accommodate in its seats two to three persons, not five seats as found out by the inspection team, inclusive of the driver. The rest of the back of the vehicle is open and bare, unless covered with a detachable camper shell, and without additional seats and usable only for carrying freight or merchandise. As to their probative value, the photographs constitute real evidence (Section I, Rule 130, Revised Rules of Court) and therefore are most convincing and satisfactory class of proof (20 Am. Jur. 600 as cited in Compendium on Evidence, 3rd Ed. by Sibal and Salazar, Jr.). In conclusion, We find petitioners' vehicle to be a truck and not an automobile hence, not subject to the ad valorem tax as provided under Section 149 of the Tax Code. (p. 48, rollo) We see no cause to disagree with that. And more so because the petitioners' reliance on mere presumptions and said contrary postures taken cannot even overcome the photographs marked Exhs. "J" to "J-5" graphically showing the subject motor vehicle. Pictures can say a thousand words, and it has been said that physical evidence are mute but eloquent manifestations of truth and they rate high in our hierarchy of trustworthy evidence (People vs. Uycoque 246 SCRA 769). Plain view shows that the subject motor vehicle is not an automobile, and thus exempt from ad valorem tax. WHEREFORE, the petition for review is DENIED DUE COURSE and is DISMISSED. SO ORDERED. Gonzaga-Reyes and Jacinto, JJ . , concur.